Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 13.9 of EDGX Exchange, Inc. Related to Communication and Routing Service Known as ConnectEdge, 73942-73944 [2014-29106]
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73942
Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–29180 Filed 12–11–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73780; File No. SR–EDGX–
2014–28]
Self-Regulatory Organizations; EDGX
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change to Rule 13.9 of EDGX
Exchange, Inc. Related to
Communication and Routing Service
Known as ConnectEdge
December 8, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
25, 2014, EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
mstockstill on DSK4VPTVN1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
amend Rule 13.9 related to a
communication and routing service
known as ConnectEdge. The Exchange
also proposes to add fees related to
ConnectEdge to its fee schedule.
The text of the proposed rule change
is available at the Exchange’s Web site
at https://www.directedge.com/, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
1 15
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II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rule 13.9 related to a communication
and routing service known as
ConnectEdge. The Exchange also
proposes to add fees related to
ConnectEdge to its fee schedule. The
Exchange currently offers and proposes
to continue offering ConnectEdge on a
voluntary basis in a capacity similar to
a vendor. ConnectEdge is a
communication service that provides
Members 5 an additional means to
receive market data from and route
orders to any destination connected to
Exchange’s network. ConnectEdge does
not provide any advantage to
subscribers for connecting to the
Exchange’s affiliates 6 as compared to
other method of connectivity available
to subscribers. The servers of the
Member need not be located in the same
facilities as the Exchange in order to
subscribe to ConnectEdge. Members
may also seek to utilize ConnectEdge in
the event of a market disruption where
other alternative connection methods
become unavailable.
Specifically, this service allows
Members to route orders to other
exchanges and market centers that are
connected to the Exchange’s network.
This communications or routing service
would not effect trade executions and
would not report trades to the relevant
Securities Information Processor. An
order sent via the service does not pass
through the Exchange’s matching engine
5 The term ‘‘Member’’ is defined as ‘‘any
registered broker or dealer, or any person associated
with a registered broker or dealer, that has been
admitted to membership in the Exchange. A
Member will have the status of a ‘‘member’’ of the
Exchange as that term is defined in Section 3(a)(3)
of the Act.’’ See Exchange Rule 1.5(n).
6 The Exchange’s affiliated exchanges are EDGA
Exchange, Inc. (‘‘EDGA’’), BATS Exchange, Inc.
(‘‘BATS’’), and BATS Y-Exchange, Inc. (‘‘BYX’’).
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before going to a market center outside
of the Exchange (i.e., a participant could
choose to route an order directly to any
market center on the Exchange’s
network). A participant would be
responsible for identifying the
appropriate destination for any orders
sent through the service and for
ensuring that it had authority to access
the selected destination; the Exchange
would merely provide the connectivity
by which orders (and associated
messages) could be routed by a
participant to a destination and from the
destination back to the participant.7
The Exchange will charge a monthly
connectivity fee to Members utilizing
ConnectEdge to route orders to other
exchanges and broker-dealers that are
connected to the Exchange’s network.
The amount of the connectivity fee
varies based solely on the bandwidth
selected by the Member. Specifically,
the Exchange proposes to charge $350
for 1 Mb, $700 for 5 Mb, $950 for 10 Mb,
$1,500 for 25 Mb, $2,500 for 50 Mb, and
$3,500 for 100 Mb.
ConnectEdge would also allow
participants to receive market data feeds
from the exchanges connected to the
Exchange’s network. In such case, the
Member would pay the Exchange a
connectivity fee, which varies and is
based solely on the amount of
bandwidth required to transmit the
selected data product to the Member.
The proposed connectivity fees are set
forth in the Exhibit 5 attached hereto
and range from $100 to $3,500 based on
the market data product the vendor
selects. The Members would pay any
fees charged by the exchange providing
the market data feed directly to that
exchange.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with the
requirements of Section 6(b) of the Act,8
in general, and Section 6(b)(5) of the
Act,9 in particular, in that it promotes
just and equitable principles of trade,
removes impediments to, and perfect
the mechanism of, a free and open
market and a national market system,
and, in general, protects investors and
the public interest. Specifically, the
7 This service is an alternative to a service that the
Exchange already provides to its Members—current
order-sending Members route orders through access
provided by the Exchange to the Exchange that
either check the Exchange for available liquidity
and then route to other destinations or, in certain
circumstances, bypass the Exchange and route to
other destinations. See Exchange Rule 11.9(b)(2)
(setting forth routing options whereby Members
may select their orders be routed to other market
centers).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices
proposal is consistent with Section
6(b)(5) of the Act,10 in that it provides
Members an alternative means to
receive market data from and route
orders to any destination connected to
the Exchange’s network, thereby
removing impediments to and
perfecting the mechanism of a free and
open market and a national market
system, and, in general, protecting
investors and the public interest. In
addition, ConnectEdge removes
impediments to and perfects the
mechanism of a free and open market
and a national market system because,
in the event of a market disruption,
Members would be able to utilize
ConnectEdge to connect to other market
centers where other alternative
connection methods become
unavailable. The proposed rule change
is also similar to a communication and
routing service implemented by the
Chicago Stock Exchange, Inc.
(‘‘CHX’’).11 The proposed rule change
will also not permit unfair
discrimination among customers,
brokers, or dealers because ConnectEdge
will be available to all of the Exchange’s
customers on an equivalent basis
regardless of whether the servers of the
Member are located in the same
facilities as the Exchange.
The Exchange also believes that its
proposal is consistent with Section
6(b)(4) of the Act,12 in that it provides
for the equitable allocation of reasonable
dues, fees and other charges among
members and other persons using its
facilities. First, the Exchange will charge
a connectivity fee to Members utilizing
ConnectEdge to route orders to other
exchanges and market centers that are
connected to the Exchange’s network,
which varies based solely on the
amount of bandwidth selected by the
Member. The amounts of the
connectivity fees are also reasonable as
compared to similar fees charged by
other exchanges. For purposes of order
routing, the Exchange proposes to
charge $350 for 1 Mb, $700 for 5 Mb,
$950 for 10 Mb, $1,500 for 25 Mb,
$2,500 for 50 Mb, and $3,500 for 100
Mb. The New York Stock Exchange, Inc.
(‘‘NYSE’’) currently charges $300 for 1
Mb, $700 for 5 Mb, $900 for 10 Mb,
$1,500 for 25 Mb, $2,000 for 50 Mb, and
10 Id.
11 See Securities Exchange Act Release No. 54846
(November 30, 2006), 71 FR 71003 (December 7,
2006) (SR–CHX–2006–34) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
Regarding the Implementation of a Communication
and Routing Service).
12 15 U.S.C. 78f(b)(4).
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$2,600 for 100 Mb.13 The Exchange
notes that, overall, the connectivity fee
for routing of orders to other market
centers proposed by the Exchange is
either similar to or less than that
charged by the NYSE.
Second, with regard to utilizing
ConnectEdge to receive market data
products from other exchanges, the
Exchange would only charge
participants a connectivity fee, the
amount of which is based solely on the
amount of bandwidth required to
transmit that specific data product to
the Member. The amounts of the
connectivity fees are also reasonable as
compared to similar fees charged by
other exchanges. For example, for
market data connectivity, the Nasdaq
Stock Market LLC (‘‘Nasdaq’’) charges
$1,412 per month for CQS/CTS data
feed, and the Exchange proposes to
charge $1,000 per month connectivity
for CQS/CTS data feed.14 The Exchange
notes that, overall, the connectivity fee
for receipt of other market centers’ data
feed proposed by the Exchange is either
similar to or less than that charged by
Nasdaq.
The participants would pay any fees:
(i) Charged by the exchange providing
the market data feed directly to that
exchange (ii) charged by a market center
to which they routed an order and an
execution occurred directly to that
market center. The Exchange itself
would not charge any additional fees.15
ConnectEdge is offered and purchased
on a voluntary basis, in that neither the
Exchange nor Members are required by
any rule or regulation to make this
product available. Accordingly,
Members can discontinue use at any
time and for any reason, including due
to an assessment of the reasonableness
of fees charged.
Moreover, the Exchange believes the
proposed fees are reasonable and
equitable because they are based on the
Exchange’s costs to cover hardware,
installation, testing and connection, as
well expenses involved in maintaining
and managing the service. The proposed
fees allow the Exchange to recoup these
costs, while providing Members with an
alternative means to connect to other
exchange and market centers. The
Exchange believes that the proposed
fees are reasonable and equitable in that
13 See NYSE’s SFTI Americas Product and Service
List available at https://www.nyxdata.com/docs/
connectivity.
14 See Nasdaq Rule 7034 (setting forth Nasdaq’s
connectivity fees for receipt of third party market
data products).
15 The Exchange’s rules and fees would not
address the fees or manner of operation of any
destination to which the participant asked that an
order be routed.
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73943
they reflect the costs and the benefit of
providing alternative connectivity.
Lastly, the Exchange also believes that
the proposed amendments to its fee
schedule are non-discriminatory
because they will apply uniformly to all
Members. All Members that voluntarily
select various service options will be
charged the same amount for the same
services. All Members have the option
to select any connectivity option, and
there is no differentiation among
Members with regard to the fees charged
for the service. Further, the benefits of
selecting such services are the same for
all Members, irrespective of whether
their servers are located in the same
facility as the Exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. To the
contrary, the Exchange believes that the
proposal will promote competition by
the Exchange offering a service similar
to those offered by the CHX, Nasdaq and
NYSE. Thus, the Exchange believes this
proposed rule change is necessary to
permit fair competition among national
securities exchanges. In addition, the
proposed rule change is designed to
provide Members with an alternative
means to access other market centers if
they chose or in the event of a market
disruption where other alternative
connection methods become
unavailable. Therefore, the Exchange
does not believe the proposed rule
change will have any effect on
competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 16 and Rule
19b–4(f)(6) thereunder.17 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
for 30 days from the date on which it
16 15
17 17
E:\FR\FM\12DEN1.SGM
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
12DEN1
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Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices
was filed, or such shorter time as the
Commission may designate, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)
thereunder.18
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing. Waiver of the
30-day operative delay would permit
the Exchange to provide Members with
an alternative means to access other
market centers particularly in the event
of a market disruption. In addition, the
Exchange represents that ConnectEdge
does not provide any advantage to
subscribers for connecting to the
Exchange’s affiliates 19 as compared to
other methods of connectivity available
to subscribers. Based on the foregoing,
the Commission believes that waiving
the 30-day operative delay is consistent
with the protection of investors and the
public interest.20 The Commission
hereby grants the Exchange’s request
and designates the proposal operative
upon filing.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
mstockstill on DSK4VPTVN1PROD with NOTICES
18 In
addition, Rule 19b–4(f)(6)(iii) requires the
Exchange to give the Commission written notice of
the Exchange’s intent to file the proposed rule
change, along with a brief description and text of
the proposed rule change, at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
19 See supra note 6.
20 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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16:57 Dec 11, 2014
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change is consistent with the Act.
Comments may be submitted by any of
the following methods:
DEPARTMENT OF STATE
Electronic Comments
Notice of Proposal To Extend the
Agreement Between the Government
of United States of America and the
Government of the Republic of
Nicaragua Concerning the Imposition
of Import Restrictions on
Archaeological Material From the PreHispanic Cultures of the Republic of
Nicaragua
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
EDGX–2014–28 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–EDGX–2014–28. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–EDGX–
2014–28 and should be submitted on or
before January 2, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–29106 Filed 12–11–14; 8:45 am]
BILLING CODE 8011–01–P
21 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00066
Fmt 4703
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[Public Notice 8966]
The Government of the Republic of
Nicaragua has informed the Government
of the United States of America of its
interest in an extension of the
Agreement Between the Government of
United States of America and the
Government of the Republic of
Nicaragua Concerning the Imposition of
Import Restrictions on Archaeological
Material from the Pre-Hispanic Cultures
of the Republic of Nicaragua
(‘‘Agreement’’).
Pursuant to the authority vested in the
Assistant Secretary of State for
Educational and Cultural Affairs, and
pursuant to the requirement under 19
U.S.C. 2602(f)(1), an extension of this
Agreement is hereby proposed.
Pursuant to 19 U.S.C. 2602(f)(2), the
views and recommendations of the
Cultural Property Advisory Committee
regarding this proposal will be
requested.
A copy of the Agreement, the
Designated List of restricted categories
of material, and related information can
be found at the following Web site:
https://culturalheritage.state.gov.
Dated: November 25, 2014.
Evan Ryan,
Assistant Secretary, Bureau of Educational
and Cultural Affairs, U.S. Department of
State.
[FR Doc. 2014–29213 Filed 12–11–14; 8:45 am]
BILLING CODE 4710–05–P
DEPARTMENT OF STATE
[Public Notice 8967; Docket No. DOS–2014–
0027]
Notice of Meeting of the Cultural
Property Advisory Committee
There will be a meeting of the
Cultural Property Advisory Committee
January 21–23, 2015 at the U.S.
Department of State, Annex 5, 2200 C
Street NW., Washington, DC. Portions of
this meeting will be closed to the
public, as discussed below.
During the closed portion of the
meeting, the Committee will review the
proposal to extend the Agreement
Between the Government of United
E:\FR\FM\12DEN1.SGM
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]]>Agencies
[Federal Register Volume 79, Number 239 (Friday, December 12, 2014)]
[Notices]
[Pages 73942-73944]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29106]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73780; File No. SR-EDGX-2014-28]
Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change to Rule
13.9 of EDGX Exchange, Inc. Related to Communication and Routing
Service Known as ConnectEdge
December 8, 2014.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 25, 2014, EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The Exchange
has designated this proposal as a ``non-controversial'' proposed rule
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with
the Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange filed a proposal to amend Rule 13.9 related to a
communication and routing service known as ConnectEdge. The Exchange
also proposes to add fees related to ConnectEdge to its fee schedule.
The text of the proposed rule change is available at the Exchange's
Web site at https://www.directedge.com/, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 13.9 related to a communication
and routing service known as ConnectEdge. The Exchange also proposes to
add fees related to ConnectEdge to its fee schedule. The Exchange
currently offers and proposes to continue offering ConnectEdge on a
voluntary basis in a capacity similar to a vendor. ConnectEdge is a
communication service that provides Members \5\ an additional means to
receive market data from and route orders to any destination connected
to Exchange's network. ConnectEdge does not provide any advantage to
subscribers for connecting to the Exchange's affiliates \6\ as compared
to other method of connectivity available to subscribers. The servers
of the Member need not be located in the same facilities as the
Exchange in order to subscribe to ConnectEdge. Members may also seek to
utilize ConnectEdge in the event of a market disruption where other
alternative connection methods become unavailable.
---------------------------------------------------------------------------
\5\ The term ``Member'' is defined as ``any registered broker or
dealer, or any person associated with a registered broker or dealer,
that has been admitted to membership in the Exchange. A Member will
have the status of a ``member'' of the Exchange as that term is
defined in Section 3(a)(3) of the Act.'' See Exchange Rule 1.5(n).
\6\ The Exchange's affiliated exchanges are EDGA Exchange, Inc.
(``EDGA''), BATS Exchange, Inc. (``BATS''), and BATS Y-Exchange,
Inc. (``BYX'').
---------------------------------------------------------------------------
Specifically, this service allows Members to route orders to other
exchanges and market centers that are connected to the Exchange's
network. This communications or routing service would not effect trade
executions and would not report trades to the relevant Securities
Information Processor. An order sent via the service does not pass
through the Exchange's matching engine before going to a market center
outside of the Exchange (i.e., a participant could choose to route an
order directly to any market center on the Exchange's network). A
participant would be responsible for identifying the appropriate
destination for any orders sent through the service and for ensuring
that it had authority to access the selected destination; the Exchange
would merely provide the connectivity by which orders (and associated
messages) could be routed by a participant to a destination and from
the destination back to the participant.\7\
---------------------------------------------------------------------------
\7\ This service is an alternative to a service that the
Exchange already provides to its Members--current order-sending
Members route orders through access provided by the Exchange to the
Exchange that either check the Exchange for available liquidity and
then route to other destinations or, in certain circumstances,
bypass the Exchange and route to other destinations. See Exchange
Rule 11.9(b)(2) (setting forth routing options whereby Members may
select their orders be routed to other market centers).
---------------------------------------------------------------------------
The Exchange will charge a monthly connectivity fee to Members
utilizing ConnectEdge to route orders to other exchanges and broker-
dealers that are connected to the Exchange's network. The amount of the
connectivity fee varies based solely on the bandwidth selected by the
Member. Specifically, the Exchange proposes to charge $350 for 1 Mb,
$700 for 5 Mb, $950 for 10 Mb, $1,500 for 25 Mb, $2,500 for 50 Mb, and
$3,500 for 100 Mb.
ConnectEdge would also allow participants to receive market data
feeds from the exchanges connected to the Exchange's network. In such
case, the Member would pay the Exchange a connectivity fee, which
varies and is based solely on the amount of bandwidth required to
transmit the selected data product to the Member. The proposed
connectivity fees are set forth in the Exhibit 5 attached hereto and
range from $100 to $3,500 based on the market data product the vendor
selects. The Members would pay any fees charged by the exchange
providing the market data feed directly to that exchange.
2. Statutory Basis
The Exchange believes that its proposal is consistent with the
requirements of Section 6(b) of the Act,\8\ in general, and Section
6(b)(5) of the Act,\9\ in particular, in that it promotes just and
equitable principles of trade, removes impediments to, and perfect the
mechanism of, a free and open market and a national market system, and,
in general, protects investors and the public interest. Specifically,
the
[[Page 73943]]
proposal is consistent with Section 6(b)(5) of the Act,\10\ in that it
provides Members an alternative means to receive market data from and
route orders to any destination connected to the Exchange's network,
thereby removing impediments to and perfecting the mechanism of a free
and open market and a national market system, and, in general,
protecting investors and the public interest. In addition, ConnectEdge
removes impediments to and perfects the mechanism of a free and open
market and a national market system because, in the event of a market
disruption, Members would be able to utilize ConnectEdge to connect to
other market centers where other alternative connection methods become
unavailable. The proposed rule change is also similar to a
communication and routing service implemented by the Chicago Stock
Exchange, Inc. (``CHX'').\11\ The proposed rule change will also not
permit unfair discrimination among customers, brokers, or dealers
because ConnectEdge will be available to all of the Exchange's
customers on an equivalent basis regardless of whether the servers of
the Member are located in the same facilities as the Exchange.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ Id.
\11\ See Securities Exchange Act Release No. 54846 (November 30,
2006), 71 FR 71003 (December 7, 2006) (SR-CHX-2006-34) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Regarding
the Implementation of a Communication and Routing Service).
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The Exchange also believes that its proposal is consistent with
Section 6(b)(4) of the Act,\12\ in that it provides for the equitable
allocation of reasonable dues, fees and other charges among members and
other persons using its facilities. First, the Exchange will charge a
connectivity fee to Members utilizing ConnectEdge to route orders to
other exchanges and market centers that are connected to the Exchange's
network, which varies based solely on the amount of bandwidth selected
by the Member. The amounts of the connectivity fees are also reasonable
as compared to similar fees charged by other exchanges. For purposes of
order routing, the Exchange proposes to charge $350 for 1 Mb, $700 for
5 Mb, $950 for 10 Mb, $1,500 for 25 Mb, $2,500 for 50 Mb, and $3,500
for 100 Mb. The New York Stock Exchange, Inc. (``NYSE'') currently
charges $300 for 1 Mb, $700 for 5 Mb, $900 for 10 Mb, $1,500 for 25 Mb,
$2,000 for 50 Mb, and $2,600 for 100 Mb.\13\ The Exchange notes that,
overall, the connectivity fee for routing of orders to other market
centers proposed by the Exchange is either similar to or less than that
charged by the NYSE.
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\12\ 15 U.S.C. 78f(b)(4).
\13\ See NYSE's SFTI Americas Product and Service List available
at https://www.nyxdata.com/docs/connectivity.
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Second, with regard to utilizing ConnectEdge to receive market data
products from other exchanges, the Exchange would only charge
participants a connectivity fee, the amount of which is based solely on
the amount of bandwidth required to transmit that specific data product
to the Member. The amounts of the connectivity fees are also reasonable
as compared to similar fees charged by other exchanges. For example,
for market data connectivity, the Nasdaq Stock Market LLC (``Nasdaq'')
charges $1,412 per month for CQS/CTS data feed, and the Exchange
proposes to charge $1,000 per month connectivity for CQS/CTS data
feed.\14\ The Exchange notes that, overall, the connectivity fee for
receipt of other market centers' data feed proposed by the Exchange is
either similar to or less than that charged by Nasdaq.
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\14\ See Nasdaq Rule 7034 (setting forth Nasdaq's connectivity
fees for receipt of third party market data products).
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The participants would pay any fees: (i) Charged by the exchange
providing the market data feed directly to that exchange (ii) charged
by a market center to which they routed an order and an execution
occurred directly to that market center. The Exchange itself would not
charge any additional fees.\15\ ConnectEdge is offered and purchased on
a voluntary basis, in that neither the Exchange nor Members are
required by any rule or regulation to make this product available.
Accordingly, Members can discontinue use at any time and for any
reason, including due to an assessment of the reasonableness of fees
charged.
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\15\ The Exchange's rules and fees would not address the fees or
manner of operation of any destination to which the participant
asked that an order be routed.
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Moreover, the Exchange believes the proposed fees are reasonable
and equitable because they are based on the Exchange's costs to cover
hardware, installation, testing and connection, as well expenses
involved in maintaining and managing the service. The proposed fees
allow the Exchange to recoup these costs, while providing Members with
an alternative means to connect to other exchange and market centers.
The Exchange believes that the proposed fees are reasonable and
equitable in that they reflect the costs and the benefit of providing
alternative connectivity.
Lastly, the Exchange also believes that the proposed amendments to
its fee schedule are non-discriminatory because they will apply
uniformly to all Members. All Members that voluntarily select various
service options will be charged the same amount for the same services.
All Members have the option to select any connectivity option, and
there is no differentiation among Members with regard to the fees
charged for the service. Further, the benefits of selecting such
services are the same for all Members, irrespective of whether their
servers are located in the same facility as the Exchange.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. To the contrary,
the Exchange believes that the proposal will promote competition by the
Exchange offering a service similar to those offered by the CHX, Nasdaq
and NYSE. Thus, the Exchange believes this proposed rule change is
necessary to permit fair competition among national securities
exchanges. In addition, the proposed rule change is designed to provide
Members with an alternative means to access other market centers if
they chose or in the event of a market disruption where other
alternative connection methods become unavailable. Therefore, the
Exchange does not believe the proposed rule change will have any effect
on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \16\ and Rule 19b-4(f)(6) thereunder.\17\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it
[[Page 73944]]
was filed, or such shorter time as the Commission may designate, the
proposed rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.\18\
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\16\ 15 U.S.C. 78s(b)(3)(A)(iii).
\17\ 17 CFR 240.19b-4(f)(6).
\18\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to
give the Commission written notice of the Exchange's intent to file
the proposed rule change, along with a brief description and text of
the proposed rule change, at least five business days prior to the
date of filing of the proposed rule change, or such shorter time as
designated by the Commission. The Exchange has satisfied this
requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange has asked the Commission to waive the
30-day operative delay so that the proposal may become operative
immediately upon filing. Waiver of the 30-day operative delay would
permit the Exchange to provide Members with an alternative means to
access other market centers particularly in the event of a market
disruption. In addition, the Exchange represents that ConnectEdge does
not provide any advantage to subscribers for connecting to the
Exchange's affiliates \19\ as compared to other methods of connectivity
available to subscribers. Based on the foregoing, the Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest.\20\ The Commission
hereby grants the Exchange's request and designates the proposal
operative upon filing.
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\19\ See supra note 6.
\20\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-EDGX-2014-28 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-EDGX-2014-28. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-EDGX-2014-28 and should be
submitted on or before January 2, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-29106 Filed 12-11-14; 8:45 am]
BILLING CODE 8011-01-P
